CMSC released a research report maintaining a "Strong Buy" rating on POP MART (09992), citing the company's overseas organizational restructuring as a driver for sustained healthy growth. The report highlighted strong momentum for IP products like LABUBU and Dimoo, emphasizing POP MART's outstanding global IP operations and flexible production capacity. The brokerage remains optimistic about the company's ability to manage trend risks and future development prospects.
Key observations from CMSC include: 1. **High-Frequency Data Trends**: Early-stage market tracking of POP MART relied on metrics such as secondary market prices on Xianyu, app downloads, search indices, and estimated online sales, though these indicators face sampling and interpretation challenges. - Downloads and search indices reflect brand awareness growth but naturally decline as IP familiarity increases. - User activity data varies by region, with the U.S. leading in daily active users, followed by China, Japan, Australia, and Thailand—though discrepancies exist compared to mid-year report disclosures. - Channel shifts (e.g., initial online-focused hot product releases to mitigate supply shortages and scalping) limit the reliability of single-channel monthly data in reflecting actual supply-demand dynamics.
2. **Offline Sales & Secondary Market**: POP MART prioritizes in-store experiences (CEO Wang Ning emphasized offline stores as key to immersive brand culture). Post-capacity adjustments, hot products are expected to gradually return to physical stores. - Secondary market transactions on Xianyu declined after platform rule changes on September 29, requiring original packaging for blind box resales. Historical data shows limited correlation between secondary prices and company performance.
3. **Trend Risk Management**: Lessons from Japanese IP firms like Takara Tomy and Sanrio indicate risks arise from supply chain mismanagement, rigid content-driven IP costs, and over-reliance on single demographics (e.g., Hello Kitty dominated 90% of Sanrio’s 2013 overseas revenue). Successful IP operators diversify across age groups, regions, and media to smooth earnings volatility.
4. **Overseas Localization Progress**: POP MART’s diversified IP/portfolio matrix, agile supply chain, and operational strengths position it to navigate trend risks. Recent restructuring shifts focus from "Chinese IPs + global channels" to a "global IPs + global channels" model, with regional HQs established in Greater China, the Americas, Asia-Pacific, and Europe. Co-COOs Wen Deyi and Si De will oversee global operations, aiming to boost regional-exclusive products from <5% (1H25) to 10-15%. Early successes include localized collaborations like Skullpanda x Wednesday and Skullpanda x XG.
**Risks**: Counterfeit control, regulatory/PR risks, store expansion delays, new IP/category setbacks, and operational challenges.